Exemption for supplies to an EOU shifted duty liability to the EOU officer, not the domestic supplier.

The exemption notifications for clearances to a 100% Export Oriented Unit covered fork lift trucks and spares under the later notification, while the earlier notification did not extend to those goods. Even where duty was payable on goods not duly accounted for, the scheme placed that liability on the Central Excise Officer in charge of the EOU, not on the domestic supplier. Applying the settled view taken in earlier orders involving the same assessee, the demand against the domestic supplier for fork lift trucks, spares and furniture was held not sustainable, and the Revenue's challenge failed.

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Issues: Whether the demand of duty on the domestic supplier for clearances of fork lift trucks, spares and furniture to a 100% Export Oriented Unit under the exemption notifications was sustainable.

Analysis: The exemption available under the later notifications covered fork lift trucks and spares, while the earlier notification did not extend to those goods. However, the scheme of the notification placed responsibility for any duty payable on goods not duly accounted for on the Central Excise Officer in charge of the 100% Export Oriented Unit. The liability for violation in such cases was therefore on the EOU and not on the domestic supplier. The reasoning followed the settled view taken in the earlier orders relied upon for the same assessee on similar issues.

Conclusion: The demand raised against the domestic supplier was not sustainable and the Revenue's challenge failed.

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